Macroeconomics Books for MA Economics

Meaning of macroeconomics

Macroeconomics is the study of the economy at an aggregate level to examine the relationship among the aggregate variables. It concerns the overall dimensions of economic life. Macroeconomics looks at the total size, shape, and functioning of the ‘elephant’ of economic experience rather than the working or dimension of the individual parts. 

More specifically, macroeconomics concerns itself with variables such as aggregate the volume of output of an economy, with the extent to which its resources are employed, with the size of the national income, with the general price level.

Macroeconomics is comparatively a new branch of economics developed after 1936 with the revolution of J.M. Keynes. In fact, macroeconomics became popular after the Keynesian revolution and that is why it is popularly known as Keynesian Economics. 

Keynes pioneered a new approach to macroeconomics and macroeconomic policies. Thus any discussion on macroeconomics starts with Keynes.  Keynes came up with a new approach to look at the economy with his famous work/book ‘The General Theory of Employment, Interest, and Money’ in 1936.

Macroeconomics shows the nature, relationship, and behavior of economic aggregates. Macroeconomics explains the process of determining income and employment. Therefore, it is also known as Income and Employment Theory. 

Macroeconomics is also known as Lumping Method because it deals with economic aggregates, not with individual units.

Generally, macroeconomics tries to solve the following macroeconomic issues:

• What determines the level of economic activates in an economy?
• How is the level of national income determined?
• What causes fluctuations in the level of output and employment?
• How is the price level determined in the economy?
• What causes disequilibrium in the BOP of the economy?
• How does an economy respond to monetary and fiscal policies?
• What ensures the stable economic growth rate?

Limitations of Macroeconomics

Despite of ever-growing implication and population, macroeconomics is not free from limitation just like having two parts in the coin, some notable limitation is as follows:

Only aggregate tendency

Macroeconomics observes only at aggregate tendencies, but it may not be representative of every sector in the economy. Decision at the macro level may not be applicable to individual units. If the goods are not homogeneous, aggregate measurement is not possible. Aggregate variables may not necessarily important.

Therefore, the aggregate variable from the economic system may be of much significance but it is not necessarily true. For example, the national income of a country is the total of all individual income. A rise in national income does not mean the individuals' income has raised. 

The increase in national income might be the result of the increase in the income of a few rich people in the country. Hence, such types of rising in the national income have the least significance from the point of view of the community.

 Different effect

The effects of aggregates in agents of the economy may be different but macroeconomics cannot address such differences in effects. For example, a rise in price level benefits the traders and the industrialist but the wage earners are the losers.

Unreliable estimates of aggregate

Due to imperfect knowledge of statistical techniques, some persons may predict the aggregate incorrectly. For example, the agricultural price decreases by 50 percent and industrial price increases by 50 percent, the general price level remains the same, because these two types of price changes neutralized each other. 

In such a situation, one may advise the government to make no change in their policy, because the general price remains constant. Actually, the government needs to implement a policy that helps the farmers who get a loss due to a fall in price in their product. Thus sometimes aggregate results may mislead in the policy-making procedure of the economy. It requires a special ability to predict the result in such a situation.

Here you can get the PDF file of popular macroeconomics books for MA Economics on TU. 

Name of the book	Authors	Download  link
Advanced Macroeconomics	Sanjay Road
Macroeconomic Theory	Gardner Ackley	Here
Macroeconomic Theories and Policies	Richard  Froyen	Here
Principles of Macroeconomics	Gregory Mankiw	Here
Macroeconomic Theory and Policy	William H. Branson	Here